Kohl’s Corporation filed a notice with the Security and Exchange Commission last week, announcing that the company will close its San Bernardino E-commerce Fulfillment Center (EFC) when the lease on that facility expires in May 2025. The company also provide notice that it would close 27 underperforming stores by April 2025. See store list at bottom.

“These measures are part of the company’s ongoing effort to increase efficiency and support the health and future of its business,” Kohl’s wrote in an 8-K filing.

The San Bernardino EFC is one of 15 EFCs and Distribution Centers in Kohl’s nationwide supply chain network. The company said that that it has increased efficiencies in recent years, with advanced technology capabilities at newer EFC facilities and expanded its ability to fulfill customer orders from store locations, allowing the company to continue fulfilling customer orders without the San Bernardino EFC.

“While Kohl’s continues to believe in the health and strength of its profitable store base, the stores identified for closure are underperforming and represent approximately 2.3 percent of the company’s more than 1,150 locations,” the company said in reference to the store closures. “Impacted associates have been informed and offered a competitive severance package or the opportunity to apply to other open roles at Kohl’s.”

Kohl’s currently estimates that it will recognize cumulative pre-tax charges of approximately $60 million to $80 million, including $30 million of non-cash charges in real estate and other asset-related charges, costs, and impairments and $30 million to $50 million of cash expenditures related to associate severance, benefits, and other exit costs. The company expects that substantially all of these charges will be incurred in the fourth quarter of 2024.

The estimated charges and the timing of such charges are reportedly based on certain assumptions, including applicable law in various jurisdictions, and actual amounts may vary from such estimates based on a number of factors, including, but not limited to, negotiations with landlords and the number of associates impacted by these activities. The company said it may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the implementation of the activities outlined.

The company said it intends to exclude these charges, which were not contemplated as part of the company’s full year 2024 financial and capital allocation outlook provided on November 26, 2024, from its non-GAAP financial measures. Management said it believes excluding these charges from its non-GAAP financial measures is useful, as it provides enhanced visibility into the company’s results excluding these charges.

The company also reaffirmed its full year 2024 financial and capital allocation outlook, excluding the charges described, as provided in the company’s third quarter 2024 earnings release dated November 26, 2024.

The downsizing also includes the closure of 27 stores by April, including 10 locations in California and more stores in New Jersey, Pennsylvania, Texas and other states. According to the company, all employees affected by this decision have been informed and offered either a competitive severance package or the ability to apply to other open roles at Kohl’s.

Store Closures

  • Massachusetts: Stoughton
  • New Jersey: East Windsor
  • Ohio: Blue Ash and Forest Park (Cincinnati)
  • Oregon: Portland Gateway
  • Pennsylvania: Pottstown
  • Texas: North Dallas
  • Utah: Riverton
  • Virginia: Herndon and Williamsburg

Image courtesy Kohl’s Corporation